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Deep Recession Takes Aim at New Jersey Papers

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The Daily Journal of Elizabeth closed yesterday in the latest manifestation of the very hard times New Jersey newspapers are facing.

Indeed, the state's especially crowded newspaper competition and the deep recession in the state suggest that The Journal could easily be joined by other papers in the months to come.

Even the strongest newspapers have been affected by a huge decline in real estate, job, automobile and retail advertising in New Jersey. For example, The Record, which is based in Hackensack and has long prospered in Bergen County, has a $110 million debt for a printing plant it ordered when business was booming. The Record's payroll is smaller by 400 employees than it was in 1988. Among the missing are 186 employees dismissed last summer.

"That hadn't happened since my grandfather had a layoff in 1931," said Malcolm A. Borg, the owner of The Record, "and I didn't enjoy it."

In some ways, the New Jersey newspaper business -- especially the counties closest to New York -- is typical of the business in all suburban areas, where metropolitan and suburban papers fight for advertising with each other and with such competitors as dozens of new cable television channels and companies that deliver advertising circulars by mail.

But New Jersey is different from other places in that every aspect of its situation is exaggerated: it is more competitive, its economy boomed more spectacularly than most in the 80's, and many newspaper executives fear that its economy is less likely than many others to rebound significantly.

As a result, newspaper profits are off almost everywhere in the state, and some of the more vulnerable newspapers -- like The Daily Journal in depressed Elizabeth -- have slipped into an unprofitability from which there may be no recovery.

New Jersey residents probably live in the most newspaper-rich environment in the nation. The New York Times, The Daily News, USA Today and The Wall Street Journal are all readily available in New Jersey, and The Philadelphia Inquirer circulates widely in the southern part of the state. This year The Times plans to open a new printing plant in Edison, N.J., that will give it added flexibility to produce editions aimed at readers in specific areas and thus increase its ability to pursue advertising in New Jersey.

The Star-Ledger, which is based in Newark and owned by the Newhouse family, which also owns Conde Nast magazines, circulates throughout the state with an array of special "zoned" editions and local sections. In a typical example of The Star-Ledger's aggressive marketing savvy, its Sunday sports section is encyclopedic, tracking sports throughout the state in great detail. Not surprisingly, its 700,000 Sunday circulation dwarfs that of every other paper in New Jersey.

The Record in Hackensack and The Asbury Park Press could be considered regional dailies, and they have expanded their areas of coverage in recent years, often encroaching on the turf of smaller dailies. For instance, The Press has challenged The Ocean County Observer in Toms River, which is owned by Goodson Newspapers. A Little Stronger

Though The Star-Ledger, The Record and The Asbury Park Press have all been hurt in the advertising crunch, they have more fundamental strength than any other dailies in the state. But a newspaper executive who spoke on condition of anonymity said that declining profits have prompted the Plangere family to quietly seek a buyer for The Asbury Park Press, and The Record is hoping to sell its new presses to reduce its debt, then lease the presses back.

In the next category are small dailies that have been squeezed from above by the local sections of larger papers and from below by a swarm of non-daily papers that have formed networks covering large areas.

The small, community daily is probably New Jersey's most endangered type of newspaper. The Central New Jersey Home News in New Brunswick is an example. The paper has been in the family of William M. Boyd, its owner, since 1879, and it covers about half of Middlesex County. Also based in Middlesex County is The News Tribune of Woodbridge and Perth Amboy, which is owned by Mr. Borg, owner of The Record. In the 80's, said Mr. Boyd, "we were really booming along" as the job market produced double-digit increases in help-wanted and real-estate classified advertising each year. Everyone prospered.

It was during this period that W. Dean Singleton, chief executive officer of Media News Group Inc., began assembling his chain of daily and non-daily newspapers in New Jersey, including The Daily Journal in Elizabeth. Bonuses Decline

Indeed, though Elizabeth was one of the state's most decaying urban centers, real-estate prices were increasing so fast that it seemed even Elizabeth might be revived by people looking for affordable housing in the expanding job market.

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Then came the stock market crash of 1987. The bonuses of New Jersey residents working on Wall Street dwindled, and service industry jobs began to decline with them. What had gone up fast began to decline just as rapidly.

In 1991, in the face of a revenue shortfall and huge social-service obligations built up during the fat years, the New Jersey Legislature passed a $2.8 billion tax increase package.

While the economy was being buffeted for many reasons, consumer confidence -- and advertising -- took a decided turn for the worse. "Everything came to a screeching halt," said Mr. Singleton.

Neither Mr. Boyd's Home News nor Mr. Borg's News Tribune is faring well now in Middlesex County. Mr. Boyd has put The Home News up for sale, and Mr. Borg has said that he intends to buy it, but cannot afford to do so right now.

Mr. Borg, whose candor extends to posting a notice at The Record last year announcing his decision to seek help for alcohol abuse, said that buying The Home News would make economic sense only if it could then be closed.

The most unpredictable parts of New Jersey's newspaper industry are its many non-dailies, which range from groups clustered in various parts of the state to independents, including The Two River Times, a weekly in Monmouth County founded in 1990 and soon after bought by Geraldo Rivera, who lives in the Red Bank area.

Claudia Ansorge, who owns 25 percent of The Times and serves as publisher, describes trying to start a paper in such a miserable economic environment as being "a dance between the raindrops," but thanks in part to Mr. Rivera's willingness to sign copies in shopping malls and other promotions, ad sales and circulation are growing.

But stand-alone non-daily papers are almost a relic of the past because, in groups -- and almost only in groups -- they have proven to be potent vehicles for attracting advertising away from dailies.

The potential profit was sufficient during the 80's boom to attract Malcolm Forbes, whose family now owns a group of non-dailies in New Jersey, which is one of several similar groups around the state.

With the closure of The Daily Record in Elizabeth, Mr. Singleton will own only one daily in New Jersey, The North Jersey Herald and News in Passaic, but he will own about two dozen non-dailies in Passaic, Union and Bergen counties with mid-week circulation of more than 650,000 and weekend circulation of nearly 500,000. He also plans to start a non-daily in Elizabeth.

Just as the dailies have suffered, so have the non-dailies, and many are thought to be losing money or close to it.

Mr. Singleton said that December was the first month in more than two years in which revenues at his New Jersey papers improved compared to the year before, and he said this was a promising sign for all of New Jersey's battered papers.

But he added that his optimism was all but unique.

A version of this article appears in print on January 4, 1992, on Page 1001021 of the National edition with the headline: Deep Recession Takes Aim at New Jersey Papers. Order Reprints|Today's Paper|Subscribe